What to look for in an A/R financing partner

What to look for in an A/R financing partner

A/R financing helps businesses in a wide range of industries and markets create stronger financial footing. By addressing the difficulties that stem from the delay between selling products or services and receiving payment, companies can develop more stable operations and make decisions focused on the long term.

Through A/R financing, organizations exchange unpaid invoices for a line of credit. This arrangement is flexible, responsive and quickly established, allowing businesses to build on their line of credit simply by passing more unpaid invoices along to their lender.

However, not all A/R financing providers can offer the same level of service, cooperation or attention to their clients. That's why it's so important to know what to look for in a partner before making this major decision.

What to seek out in an A/R financing partner

A steady, positive history

A strong track record means a lot when it comes to A/R financing. No business wants to partner with a lender or financial institution that can't demonstrate its reliability, nor results with other companies in similar positions. A/R financing requires an ongoing relationship where both sides can interact in a productive way due to the variable, individual nature of the line of credit provided to each business.

When a lender has past expertise in effectively managing A/R financing relationships, it shows they understand the unique format used in this form of lending. That's a vital consideration when you have to choose who to trust to provide a functional, useful line of credit to your business. TAB Bank has 20 years of experience working with businesses to provide lending and financial services, building a resume that displays a clear commitment to positive results.

A commitment to building and prioritizing individual relationships with clients

A/R financing involves a lot of moving parts. The size of the line of credit, the number and value of invoices passed on to the lender, the frequency with which that process takes place and many other factors are all specific to the individual arrangement and can regularly change. A financial institution that doesn't engage with its clients or seem to care about the details of their short- and long-term operations may not provide the best possible level of service.

On the other hand, a lender that stays involved with its clients can offer some significant advantages. With a substantial understanding of how a business functions, a lender can provide meaningful advice that's relevant to the specific situation. They can offer suggestions for actions to take or other financial products to use that fit into an organization's goals and workflows. These benefits supplement the existing lending relationship and create better results for everyone involved. TAB Bank is proud to offer every client a dedicated relationship manager who makes it his or her business to develop knowledge and offer accurate information, targeted insight and useful suggestions.

The right tools for the job

Maintaining an ongoing awareness of the specifics of a line of credit provided through A/R financing is vital for companies to use this asset to its fullest extent. With all of the secure digital tools currently available to businesses, an online portal is one of the most efficient ways to keep tabs on credit utilization and the many other factors involved in A/R financing. Financial institutions that offer such tools to their clients demonstrate a clear commitment to visibility and make the day-to-day process of managing that line of credit easier.

TAB Bank provides every one of our clients with a suite of streamlined business and online banking tools that allow for 24/7 visibility into an A/R financing line of credit. That's just one of the many advantages our partners enjoy.

Making the right choice

A/R financing offers an effective mix of flexibility and quick access to credit while addressing the time-to-payment issues that so many companies face from time to time. To get the most out of your decision to use this especially powerful form of lending, make sure you partner with a financial institution that has your best interests at heart.

About the Author

Prior to joining TAB Bank, Mr. Queyrouze amassed over 30 years of commercial finance and commercial banking experience. His career has included various credit, sales, and portfolio management positions in asset-based lending, factoring, corporate banking, oil and gas finance, real estate lending, financial institutions, healthcare finance, and middle marketing lending. Previous roles include Senior Vice President/Director of Loss Mitigation for Whitney Bank where he managed the resolution of a multi-billion dollar problem loan portfolio. He has also previously served as Division Credit Executive for PNC Business Credit and as Chief Operating Officer of The Receivable Exchange, playing a critical role in the launch of this internet-based, factoring auction platform.

Mr. Queyrouze holds a Bachelor of Science degree in Accounting from Louisiana State University. He has also taught many classes on financial analysis, cash flow analysis, loan structuring, and workout strategies. He has served in many volunteer leadership positions for non-profit organizations advocating arts and humanities and disease awareness and prevention. As President, Mr. Queyrouze oversees all strategic, financial, credit, and operational functions of the bank.

Is A/R Financing Good for Your Business Accounts receivable financing offers business owners a unique and powerful strategy for managing cash flow issues and cutting down on the time spent waiting...

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